Could innovative approaches to home care finally shake the industry's fraud problem?

Last week, at a forum hosted by the Alliance for Health Reform and the Kaiser Family Foundation, Eric De Jong, M.D., director of geriatrics at MedStar Washington Hospital Center, explained how an innovative home care model could improve care for Medicare's sickest elderly patients while saving millions--and potentially billions--in healthcare costs.

DeJong co-founded the Medical House Call Program at MedStar in 1999, but since 2012 he has been working on a more targeted approach to home care for frail seniors. As De Jong explained at the forum, the demonstration project known as Independence at Home (IAH), is a "highly targeted clinical service" that focuses on patients who are frail, disabled and have high healthcare costs in the past year. These patients make up just 5 percent of the patient population, but represnet nearly 50 percent of healthcare costs, De Jong said.

The IAH model goes beyond house calls and home care. A team of medical professionals with 24/7 availability coordinates all aspects of medical care including social services, medical services, subspecialty visits and transportation, or "whatever they need," De Jong said.

During the first year of the demonstration project, the IAH model saved more than $25 million in Medicare costs, an average of $3,000 per beneficiary, according to the Centers for Medicare & Medicaid Services (CMS). Expanding the program nationwide to roughly 2 million eligible seniors could save as much as $35 billion over the next 10 years.

Several days after De Jong presented his innovative idea, a Texas physician, Jacques Roy, was found guilty of orchestrating the largest home health fraud scheme executed by a single doctor, fraudulently billing $375 million to Medicare.

Clearly, De Jong and Roy are two very different doctors. De Jong seems, by all accounts, to be an earnest, forthright physician actively seeking ways to improve care for an aging population. For him, Medicare savings is just icing on the cake. Patient care is paramount.

Roy, on the other hand, is a calculated criminal who preyed on the homeless to carry out a scheme that churned through patients with machine-like efficiency. He helped no one and was motivated by an overwhelming greed that ultimately led to his demise when investigators noticed he was billing for significantly more patients than anyone else in the country.

These are two physicians (well, one former physician, now) on polar opposite ends of the ethical spectrum that underscore the current tug of war playing out within the industry. On one hand, medical professionals are searching for ways maximize care at home, and avoid costly and often detrimental trips to the hospital. On the other hand, the industry has been plagued with physicians and owners content to take advantage of payment system that has been lax for more than 20 years.

In its 2016 Work Plan, the Office of Inspector General highlighted the home health prospective payment system as a major compliance concern. Since 2010, home health benefits have been linked to nearly $1 billion in improper payments. A previous report indicated one in four home health agencies submitted improper claims to Medicare.

In a similar vein, physician house calls have seen a 40 percent spike in Medicare spending, skyrocketing to $268 million in 2012. During last year's historic fraud takedown, a total of 73 people were arrested for submitting $263 million in false claims for home healthcare, and six Dallas physicians were arrested for a house call scheme that stole $43 million.

Innovative home health programs like IAH are desperately needed, but it can be hard to look past the dark shadow that has lingered over the industry for years. How do we ensure these new programs are not looted by physicians like Roy--innovative in their own twisted way, I suppose--who target the weak and vulnerable for personal gain?

Here's the good news: Value-based programs like IAH may have stumbled on a way to shake that pesky shadow. During his presentation, De Jong emphasized that the value of the program is measured first and foremost by how providers meet the goals and outcomes of the patient. Perhaps more importantly, providers receive "no upfront payment" until they have achieved a reduction in per capita Medicare costs. The program also links savings to six specific quality metrics.

That sounds like one too many hoops to jump through if you're a provider looking for a quick, easy buck.

In February, CMS responded to home health fraud risks with a proposed rule that would collect data from a random sample of nursing homes as part of a probable fraud measurement pilot, and launch a preauthorization program in five states--a proposition that providers argued was "ill-suited to target fraud and abuse."

Those providers may be right. Perhaps a better approach is to reconstruct the way home health is paid is through innovative programs like IAH that emphasize value, and would free the industry from its burdensome shadow. Then, perhaps, the fraudulent payments could suddenly transform into cost savings. - Evan (@HealthPayer)